[Federal Register Volume 59, Number 228 (Tuesday, November 29, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29273]


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[Federal Register: November 29, 1994]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1837 and 1852

RIN 2700-AB77

 

Revision to NASA FAR Supplement Coverage on Pension Portability

AGENCY: Office of Procurement, Procurement Policy Division, National 
Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This rule amends the policies regarding pension portability 
under NASA contracts. It amends NASA's policies dealing with vesting 
period requirements, flowdown to subcontractors, and sets forth the 
conditions when pension portability would be appropriate. The rule 
establishes more consistent treatment of the vesting period and 
subcontractor flowdown issues.

EFFECTIVE DATE: December 29, 1994.

FOR FURTHER INFORMATION CONTACT:
Mr. Joseph Le Cren, (202) 358-0444.

SUPPLEMENTARY INFORMATION:

Background

    On April 19, 1994, a proposed rule to amend the NFS to revise 
NASA's regulation on pension portability was published in the Federal 
Register (59 FR 18518) for comment. All comments were reviewed. No 
changes were made as a result of the comments. However, a review of the 
proposed rule in response to one of the comments disclosed the omission 
of a comma in 1852.237-71(a)(ii) between ``defined contribution plan'' 
and ``or a multiparty benefit plan.'' The comma is in the existing 
clause at 1852.237-71 but had been inadvertently omitted in the 
proposed rule. The final rule restores the comma.

Impact

    NASA certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This rule does not 
impose any reporting or record keeping requirements subject to the 
Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1837 and 1852

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR parts 1837 and 1852 are amended as follows:

    1. The authority citation for 48 CFR parts 1837 and 1852 continues 
to read as follows:

    Authority: 42 U.S.C. 2473(c)(1).

PART 1837--SERVICE CONTRACTING

    2. Subpart 1837.1 is revised to read as follows:

Subpart 1837.1--Service Contracts--General

1837.101  Definitions.
1837.110  Solicitation provisions and contract clauses.
1837.170  Pension portability.

    Authority: 42 U.S.C. 2473(c)(1).

Subpart 1837.1--Service Contracts--General


1837.101  Definitions.

    Pension portability means the recognition and continuation in a 
successor service contract of the predecessor service contract 
employees' pension rights and benefits.


1837.110  Solicitation provisions and contract clauses.

    The contracting officer shall use the clause at 1852.237-71, 
Pension Portability, in a solicitation, contract or negotiated contract 
modification for additional work when the procurement officer 
determines, in accordance with the requirements of 1837.170, that 
pension portability is in the Government's best interest.


1837.170  Pension portability.

    (a) It is NASA's policy not to require pension portability in 
service contracts. However, pension portability requirements may be 
included in a solicitation, contract, or contract modification for 
additional work under the following conditions:
    (1)(i) There is a continuing need for the same or similar services 
for a minimum of five years (inclusive of options) and, if and when the 
contractor changes, a high percentage of the predecessor contractor's 
employees are expected to remain with the program; or
    (ii) Where the employees under a predecessor contract were covered 
by a portable pension plan, a follow-on contract or a contract 
consolidating existing services shall include pension portability as 
long as the total contract period covered by the plan, past and future, 
covers five years.
    (2) Only defined contribution plans, or multiparty defined benefit 
plans operated under a collective bargaining agreement where the plan 
follows the employee instead of the employer, shall be permitted in the 
portability provisions;
    (3) Vesting shall be 100 percent at the earlier of one year of 
continuous employee service or contract termination;
    (4) There is a clear description of the plan, including coverage 
regarding service, pay, liabilities, vesting, termination, and benefits 
from prior contracts, as appropriate; and
    (5) The procurement officer has made a written determination that 
such a provision is in the Government's best interest, including the 
facts supporting that determination.
    (b) The procurement officer shall maintain a record of all written 
determinations that the use of pension portability is in the 
Government's best interest.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Section 1852.237-71 is revised to read as follows:


1852.237-71  Pension portability.

    As prescribed at 1837.110(a), insert the following clause:

Pension Portability

(Nov 1994)

    (a) In order for pension costs attributable to employees 
assigned to this contract to be allowable costs under this contract, 
the plans covering such employees must:
    (i) Comply with all applicable Government laws and regulations;
    (ii) Be a defined contribution plan, or a multiparty defined 
benefit plan operated under a collective bargaining agreement. In 
either case, the plan must be portable, i.e., the plan follows the 
employee, not the employer;
    (iii) Provide for 100 percent employee vesting at the earlier of 
one year of continuous employee service or contract termination; and
    (iv) Not be modified, terminated, or a new plan adopted without 
the prior written approval of the cognizant NASA Contracting 
Officer.
    (b) The Contractor shall include paragraph (a) of this clause in 
all subcontracts for continuing services under a service contract 
where (1) the prime contract requires pension portability, (2) the 
subcontracted labor dollars (excluding any burdens or profit/fee) 
exceed $2,500,000 and ten percent of the total prime contract labor 
dollars (excluding any burdens or profit/fee), and (3) the 
conditions at 1837.170 are satisfied.
[FR Doc. 94-29273 Filed 11-28-94; 8:45 am]
BILLING CODE 7510-01-M